When Russia invaded Ukraine, the United States imposed sanctions and tariffs designed to gradual the Russian financial system — together with steeper tariffs on lumber from the nation’s huge and profitable timber business.
However a examine launched Thursday by the environmental group EarthSight discovered that whereas tariffs helped cut U.S. imports of plywood from Russia in half from 2021 to 2022, outpacing an general decline in plywood imports from all nations of 18 %, Russia stays the second-largest overseas provider of plywood to the U.S. The U.S. straight imported not less than $1.2 billion price from Russia in 2022.
Plywood stays considered one of the largest sectors of shipments of products apart from fuel and oil coming straight from Russia and its ally Belarus into the U.S., accounting for roughly half of all Russian client items touchdown on American shores from November 2022 to January, in line with an evaluation of Russian export and U.S. import information by EarthSight.
After Russia launched its invasion in February 2022, the U.S. positioned a hefty 50 % tax on Russian and Belarusian plywood. The European Union and United Kingdom banned Russian wooden merchandise altogether.
“It’s a scandal,” stated Sam Lawson, director of London-based EarthSight. “I believe most U.S. customers shall be shocked.”
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Lawson stated that “U.S. customers are underneath the impression that the U.S. is doing every part it can to isolate Russia economically. The actuality is that there are nonetheless massive areas of enchancment obtainable for nice sanctions. And that is considered one of the most vital ones.”
EarthSight referred to as for the U.S. to comply with the E.U. and the U.Okay. and ban Russian timber imports, and to sanction a Russian oligarch who owns a big stake in an exporting lumber mill.
EarthSight additionally raised considerations about whether or not timber is being felled from huge forests owned by the Russian army, in order that plywood gross sales not directly profit its armed forces. The forests, together with one in Irkutsk, have produced greater than 1 million cubic meters of timber in a yr. Since the battle’s begin, impartial inspectors have left Russia, making it tougher to know the place the wooden goes.
Yehor Hrynyk, a Kyiv-based forest conservationist with the Ukrainian Nature Conservation Group, stated, “If you purchase one thing from Russia these days, you might be principally supporting the Russian battle machine.” He counts a number of of his colleagues amongst the battle useless.
Russian birch
Plywood imported from Russia and Belarus is often higher-grade, typically comprised of Baltic or Russian birch, and used principally in development and furnishings.
The largest single U.S. importer of Russian plywood recognized by EarthSight is PG Wooden Imports based mostly in suburban Atlanta, which imported a 3rd of the Russian timber merchandise arriving at U.S. ports throughout the previous six months, averaging three delivery containers a day.
Firm officers didn’t reply to requests for remark. NBC Information confirmed that not less than 100 plywood shipments to PG Wooden Imports got here straight from Russia, in line with import information from Panjiva, a provide chain analysis group.
Considered one of PG Woods Russian suppliers is Vyatsky Plywood, a subsidiary of Segezha Group, which is generally owned by the Moscow-based conglomerate Sistema Group. Sistema was based three a long time in the past by Vladimir Yevtushenkov, with stakes in telecommunications, resorts, on-line retail and pharmaceutical considerations.
Yevtushenkov is shut sufficient to the regime that he was amongst the interior circle of 37 oligarchs who met with Putin in the Kremlin on Feb. 24, the day Russia invaded Ukraine. In April, he was personally sanctioned by the U.Okay. The U.S. has not sanctioned both Yevtushenkov or his corporations.
Vyatsky Plywood was amongst the largest plywood suppliers from Russia to the U.S. in current months, with shipments topping 1,200 cubic meters a month, in line with EarthSight’s evaluation of Russian export and U.S. import information.
Lawson referred to as for additional sanctions on Yevtushenkov and his corporations. “The movement of cash to him must cease,” Lawson stated.
Yevtushenkov didn’t instantly reply to a request for remark.
The U.S. Commerce Division didn’t instantly reply to a request for remark.
Third nations
Whereas direct shipments from Russia proceed into the U.S., some merchandise comprised of Russian timber are shipped not directly and keep away from greater import tariffs.
In September, one other U.Okay. environmental group, Environmental Investigation Company, discovered some Russian birch was despatched by way of Vietnam and China earlier than getting shipped to the U.S. Since it was not labeled Russian birch, it was not topic to steep U.S. tariffs.
One nation that elevated its plywood exports to the U.S. in 2022, in line with EarthSight’s evaluation, was Turkey, which neighbors Russia on land and on the Black Sea.
Hrynyk, who additionally tracks Russian timber exports, stated he has seen Russian birch plywood routed by way of Kazakhstan to evade European Union sanctions.
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However, Lawson stated, “the largest drawback is direct shipments to the U.S.”
In July, Pavel Chashchin, head of Russia’s Federal Forest Administration Company, advised the Russian information service Tass that Russia wouldn’t “endure a lot” from sanctions due to sturdy demand, notably from Asia. Amongst the U.S. corporations that continued commerce with Russia, in line with SEC filings, is Worldwide Paper Co., based mostly in Memphis, Tennessee, the world’s largest pulp and paper maker. Since 2007, it has operated Ilim Group, a three way partnership half owned with Russian companions, that ranked amongst Russia’s largest pulp and paper companies. It was a profitable a part of Worldwide Paper.
Worldwide sanctions had been affecting the firm, Worldwide Paper advised shareholders final yr. The firm stated it was taking a look at promoting its half of the firm. Worldwide Paper introduced in January it is promoting its stake to its Russian companions for $508 million. A date for the sale has not been introduced, and is pending regulatory approval in Russia.
